It seems that the local authorities in Formosa levied an enormous lekin tax
on native produce. The people refused to pay the tax and threatened to
discontinue planting. The authorities then concluded to collect this tax
from the foreign merchants after the produce (in this case sugar) had
reached the go-down of the merchants. The foreign merchants refused to pay
this tax on the ground that it was really an export tax and contrary to the
treaties.
I have presented this question to the Tsung-li yamên fully, as you will see
by a copy of my communication which is herewith inclosed.
I will communicate the answer when the same is received.
[Inclosure in No. 260.]
Mr. Denby to the
foreign office.
Legation of the United States,
Peking, December 2,
1886.
Your Imperial Highness and Your
Excellencies:
I have the honor to inform your Imperial highness and your excellencies
that a question of some importance has been presented to mo by American
merchants doing business in Formosa, through the United States consul at
Amoy. I beg leave to state the same to your imperial highness and your
excellencies, and most respectfully to ask your interposition in order
that justice may be done.
The treaty of 1858 between China and the United States fixes an export
duty on sugar as follows: “Sugar, brown, per 100 catties, 1 mace 2
candareens; sugar, white, per 100 catties, 2 mace. The treaty provides
that this tariff shall henceforward and until duly altered under the
provisions of treaties be in force at the ports and places open to
commerce.”
If the foreign merchant brings native produce down from the interior
under transit passes, he pays one-half duty, which payment exempts the
goods from all charges on route. But if he buys the goods in the open
ports from the producer, the rule has been to pay only the export duty.
Now it happens that in the island of Formosa the local authorities
imposed a lekin tax on all produce, amounting, I am informed, to from 10
to 15 per cent. on the value of each article.
The collection of this enormous tax was resisted by the producers, who
refused to pay it and threatened to discontinue planting if it was
insisted upon. The local authorities then abandoned the collection of
this tax in the interior and concluded to collect it at the port of
shipment from foreigners. For that purpose they established lekin
stations at the port of Takow and Anping (a port of Vainanfu). The
collection of such a tax was justly regarded by the foreign merchant as
the imposition of a new export duty. It seems that the British consul,
who is also consular agent of the United States, Mr. Warren, arranged
with the local authorities that until the final decision of the high
authorities at Peking on the legality of this tax, the goods might be
shipped by giving bond guarantying the payment of the tax, should it be
decided that such a tax could be levied within the limits of a treaty
port. If the local authorities for any reason find themselves unable to
collect lekin on the produce while it is en route, this inability
furnishes no reason why the foreign merchant, after he has bought the
goods and has them in his godown, should pay this tax.
If it is competent for the local authorities to levy what lekin they
please, it becomes clearly impossible for the foreign merchants to do
business at all. If he is liable to pay this tax he would never know how
much his goods would cost him.
I am informed that the lekin tax levied in Formosa, is for white sugar,
No. 1, 40 cents per basket of 132 pounds; and for brown sugar, No. 1, 20
cents per basket of 132 pounds. Taxes on Nos. 2 and 3 are
proportionately larger. Since the bond system was agreed on the taxes
have been largely increased. There is no means of knowing to what amount
the tax may be hereafter increased. This uncertainty is very detrimental
to trade.
The sugar season is now about to open, and it is important that the
question of the liability of the foreign merchants to pay lekin on sugar
in the two ports should be Bottled.
I therefore submit the whole question to your Imperial highness and your
excellencies, hoping that you will do justice in the premises.
[Page 174]
I respectfully request your Imperial highness and your excellencies to
make an order that native products which have been bought by the foreign
merchants shall only he required to pay the regular export duty, and
shall not he required to pay lekin taxes.
I have, etc.,
